Whitcomb v. Denio

The opinion of the court was delivered by Ross J. A purchaser induced to make a purchase by fraud, on discovering the fraud, may affirm the contract and bring an action to recover the damages occasioned by the fraud ; or, if it is then in his power to place the vendor in statu quo, he may tender back the purchase, rescind the contract, and, if the price is unpaid, defend when sued for its recovery, or, if the price of the purchase has been paid, sustain an action against the vendor for the money paid. Such contracts are not void, but voidable at the election of the defrauded party. In whichever form of action the question may arise, the establishment of the fact that the contract was induced by fraud, is material, and any legitimate evidence to prove such fact, admissible. In our judgment the evidence objected and excepted to, tended to establish that the plaintiffs were induced to purchase the notes by the fraud of the defendant. If [389] believed by the jury it showed that the defendant not only stated that the notes were good, but that they were secured by mortgage on seventy-five acres of land in Fairfield, and that there was no other mortgage or claim on said land, which last was then known to the defendant to be false. The whole of the defendant’s representations on that occasion respecting the notes was admissible, although some selected portions thereof, if standing alone, would be but the expression of an opinion, and for that reason would not subject the defendant to an action for their falsity. This is probably true of the naked representation that the notes were good and all right, but, when taken altogether, this expression of opinion is supported and made to rest on a statement of what he claimed to be facts personally known by him, in regard to how the notes were secured, and that they were a first and only claim on the security, which statement is shown to have been then known by him to be false. This evidence was properly admitted. These representations of facts, as of his own knowledge acquired from a personal examination of the land and of the records of the title thereof, made by the defendant to induce the purchase, the plaintiffs had the right to rely upon, and were not put upon inquiry in-regard to their falsity by the fact that they were told by the defendant that they could verify them by inquiry of A. G. Soule, town clerk of Fairfield, or of Hugh McGinn. Such reference to parties who would be likely to know of their truth or falsity, had a tendency to avoid and put to rest any suspicion of the falsity of his representations. The plaintiffs had the right to rely upon the representations so assuringly made, until some fact came to their knowledge tending to raise at least a reasonable suspicion of their falsity. It is not the right of the defendant to complain that his own representations gained .credence, and left no suspicion in regard to their truthfulness resting in the • minds of the plaintiffs. The court correctly refused to comply with the defendant’s request, and there was no error in its charge on this subject. The plaintiffs were under no duty, and consequently did not lose their right, to rescind, by delay in the exercise of that right until they discovered the fraud. The defendant by his request only claimed that they were bound to exercise this right within a rea [390] sonable time after they were legally chargeable with a knowledge of the fraud. This was the rule which the court adopted, and is clearly the correct rule. In some of the cases it is said that the defrauded party must offer to rescind “ immediately ”, “ at once ”, “ at the earliest practicable moment ” after discovering the fraud. All these expressions are only another form of declaring that it must be done within a reasonable time. What is a reasonable time must be determined by the circumstances of each case, depending upon where the parties reside relatively to each other, what must be done to make an offer of return of the purchased property, the means at hand to determine whether the party can be placed in statu quo, and various other elements. It would seem to be the better-established doctrine that if the purchaser do nothing to acquiesce in or affirm the contract, after discovering the fraud, mere delay for the purpose of deliberation longer than a reasonable time to disaffirm the contract, will not defeat his right to rescind, if during such delay the position of the vendor has not been altered. Benj. Sales, s. 452. The jury have found under proper instructions that the plaintiffs tendered back the notes in the same condition they were in when purchased, and demanded a return of the money paid therefor within a reasonable time after they were made aware of the fraud. The defendant claims that the court erred in submitting this question to the jury, inasmuch as it is found that the facts bearing upon whether they exercised their right to rescind within a reasonable time were uncontradicted. He insists that it was a question of law on the undisputed facts to be determined by the court. If this claim should be admitted, on the undisputed facts, we think the jury determined this question in the same ^ manner in which it would have been the legal duty of the court to have determined it. Whatever may be the rule in other States in regard to its being the duty of the court, when the facts are undisputed, to determine, as a matter of law, whether a thing has been done within a reasonable time, or with reasonable care, diligence, or prudence, or to determine any other fact which involves the judgment of the trier upon an existing state of facts and circumstances, it has been the almost universal practice in this State, from the earliest rec [391] ollection of the oldest members of the court and bar, to submit such question to the determination of the jury. In determining such questions of judgment upon a state of facts varying in almost every case, as a matter of law, the judgment of one or but three men, at most, controls, and that, the judgment of a particular class of men, not always the most conversant with all the details and difficulties of the administration of the practical affairs of life. Such questions can hardly be said to be pure questions of law, but rather mixed questions of law and fact. In submitting such questions to the determination of the jury, the average judgment of twelve practical men, versed in all the ordinary affairs of life, is obtained. If but a single fact is involved, and not a combination of facts and circumstances, the determination may become a question of law addressed solely to the court. Hence, there was no error in submitting this question to the jury. Nor was there any error in the charge in respect to the defendant’s being placed in statu quo by the return of the notes in the same condition as when received. The plaintiffs had not done nor omitted anything by which they were unable to return the notes in the same condition as when received. The defendant is presumed to have had the money received for the notes so that he could have returned the same. The fact that the land may have depreciated in value, or the prior claim thereon become larger, or that the maker of the notes may have had property that might by possibility have been attached, while the plaintiffs were relying upon the defendant’s fraudulent representations, cannot defeat the plaintiffs’ right to rescind. To give the defendant the advantage of these consequences, if they arose before the ‘fraud was discovered, would be to allow him to take advantage and make a gain from his own fraud. When the plaintiffs rightfully offered to rescind the contract, thereafter they held the notes without contract as the property of the defendant, and he held the money received for the notes as money belonging to the plaintiffs, which they might recover in an action of general assumpsit. The result is, we find no error in the judgment of the County Court, and the same is affirmed.